Puerto Rico To Host Private Restructuring Talks With Creditors

The Government Development Bank for Puerto Rico will host talks with its creditors on potential restructuring of its debt on Friday, ahead of a Dec. 1 deadline to repay $347 million in debt service. The private conversation will be held in New York and will focus on a restructuring plan the commonwealth has proposed, a spokesman for the GDB said Thursday. While Puerto Rico prepares to make its case to the U.S. Senate Judiciary Committee regarding debt relief ahead of a Dec. 1 hearing, conversation about federal support for the debt-laden territory is focusing on potential for some type of fiscal control board for the island, analysts said. The Puerto Rico legislature passed legislation to establish a local board, but a federally authorized board is also under consideration. A Puerto Rico restructuring would be the largest-ever in the $3.6 trillion municipal-bond market, surpassing Detroit's record bankruptcy filing in July 2013, which involved about $8 billion of bonded debt. A Puerto Rican agency defaulted on a $58 million debt payment on Aug. 3, the first-ever default for the island, because lawmakers failed to allocated funds in a budget crunch. Also read: 3 things to know about Puerto Rico’s debt crisis